JPMorgan Chase Buys Bloomspot to Expand Card Marketing

JPMorgan Chase & Co,
one of the biggest card issuers and transaction processors, said
it has bought Silicon Valley firm Bloomspot Inc to expand its
consumer marketing programs for merchants.

JPMorgan Chase & Co,
one of the biggest card issuers and transaction processors, said
it has bought Silicon Valley firm Bloomspot Inc to expand its
consumer marketing programs for merchants.

The deal, terms of which were not disclosed, will let the
bank deliver a range of targeted advertisements, coupons and
other discounts to cardholders on behalf of stores that are also
customers of the bank, said Jeff Kinder, president of Chase
Offers.

Chase may deliver the ads on its customer websites and use
systems to deduct personalized discounts when customers pay
merchants with their cards. Chase.com ranks among the 30-most
visited websites, Kinder said.

Other financial companies with card businesses, such as Bank
of America Corp and American Express Co, have
also added digital tools as the industry builds on a marketing
history that goes back to stuffing promotions into envelopes
with monthly bills to customers.

Chase expects the new tools to bring in revenue by
encouraging customers to make card purchases, for which it
receives processing fees, and by being paid by merchants for
marketing services, Kinder said.

Gerard du Toit, a banking industry consultant at Bain & Co,
said big card companies can win loyalty from consumers if they
make it easier to use discounts, and attract additional business
from merchants if they make come-ons more successful.

The specter of coupon companies, such as Groupon Inc
, trying to develop successful business models has also
spurred the banks to act.

"The ultimate place they are all trying to go is
location-based offers" tied to how close customers are to
stores, du Toit said. "If the banks don't get there, some
start-up will."